Everything seemed great a day ago.
The storm cleared. The markets exploded higher.
Tariffs were dropped to 10% for the next 90 days for hopeful negotiations. All of which allowed wary investors to breathe again. The European Union announced a similar 90-day reprieve – just days before launching tariffs against the U.S.
Then, just when we thought the storm was gone, markets got hit again.
This time, it’s because of the standing uncertainty with 125% tariffs on China.
“The increase in China tariffs but delay in others leaves the effective tariff rate at 23%, at historical highs,” Michael Gapen, Morgan Stanley chief U.S. economist said, as quoted by CNBC. “Delays help, but do not reduce uncertainty.”
It’s Why the Broader Markets are Slipping Again
It’s also a reminder to always hedge for volatility – especially with the trade war still on.
As we said on February 4, keep an eye on the Volatility Index – and on related opportunities, which included:
ProShares Ultra VIX Short-Term Futures ETF (SYM: UVXY) -- The ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index. When the VIX pops, the UVXY typically follows.
On February 4, the UVXY traded at $19. Today, it’s up to $38.40.
iPath S&P 500 VIX Short-Term Futures (SYM: VXX) -- The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index.
On February 4, the VXX traded at around $44. It’s now up to $74.55.
ProShares VIX Short-Term Futures ETF (SYM: VIXY) -- ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.
On February 4, the VIXY traded at around $43. It’s now up to $73.
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Written by Ian Cooper